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IP: Look Who's Minding The Store
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Date: Tue, 27 Oct 1998 05:13:01 -0500 (EST)
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Subject: IP: Look Who's Minding The Store
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William Reinsch is the Under Secretary for Export Administration
(BXA) from the U.S. Commerce Department. Mr. Reinsch has been
with the Commerce Department since 1994, starting his service
under Ron Brown. As head of BXA, Reinsch is charged with
administering and enforcing American high-tech export control
policies and anti-boycott laws.
Reinsch controls billions of dollars in American technology
exports from his position at BXA. For example, Reinsch controls
high-speed computers, advanced secure communications systems and
encryption software. According to the Commerce Department,
Reinsch's job also includes helping "Russia and other newly
emerging nations develop effective export controls systems and
convert their defense industries to civilian production."
Interestingly, Mr. Reinsch has zero experience in either
technical matters or military affairs. Reinsch's only
qualification is that he was an aide to Senator Rockefeller and
former Senator Heniz. This is quite unusual for a person
charged with such an export job involving the international
According to the Commerce Department, Reinsch's only business
experience consists of "President of the Saint Mark Elderly
Housing Corporation." It is certain that Reinsch's business
experience running rental housing for the aged has little
application toward the export of advanced defense related
equipment to Russia and China such as super-computers. Yet,
during Mr. Reinsch's tenure a wide range of advanced technology
has been shipped outright to China, India and Russia.
I once had the opportunity to ask Mr. Reinsch about one specific
transfer he worked on in 1995 for Loral. According to Commerce
documentation, Mr. Reinsch exchanged a series of highly
classified memos with Commerce lawyer Bettie Baca on the export
of Loral GLOBALSTAR satellites to be launched by the Russians.
President Clinton signed the waiver for Loral to launch from the
former Soviet Union in July 1996. Clinton's waiver included the
transfer of encrypted telemetry control systems to China for the
I cornered Bill Reinsch in April 1998 at the Rayburn
Congressional office building after a conference on President
Clinton's encryption policy. At first, Mr. Reinsch claimed he
did not author the documents on Loral satellite exports. I then
presented an official list of items from the U.S. Commerce
Department that showed he indeed did author the 1995 Loral
memos. At this point Reinsch's face went pale and he ran from
I gave chase, demanding answers with tape recorder in hand,
attracting the attention of several dozen Congressional staffers
and a select few from the press as witnesses. Reinsch, however,
was faster. He pushed past the crowded entrance and dashed down
the Congressional hallway, running in full stride in his
three-piece suit. Since then, Mr. Reinsch has refused all
requests for an interview.
Until recently, Reinsch controlled commercial satellite exports.
President Clinton passed the authority to control satellite
exports to the Commerce Department by executive order in 1996.
Republican legislation signed by President Clinton in October
1998 puts that authority back to the State Department and the
Another example of Mr. Reinsch and his experience with the
defense industry through elderly housing is the export of high
speed computers to Russian and Chinese nuclear weapons labs. In
1995 Bill Reinsch wrote a memo to Ron Brown detailing a secret
meeting with a group of computer CEOs, consisting of Apple,
AT&T, Compaq, Cray, Silicon Graphics, Digital Equipment
Corporation, Tandem, Sun and Unisys. The group is called the
CSPP or Computer Systems Policy Project.
CSPP computer executives have backed Clinton since 1992 with big
bucks. For example, Apple's chairman John Schully is a major
donor to the Clinton campaigns and a long time supporter.
In 1995 the CSPP lobby group was led by Ken Kay, an employee of
Tony Podesta, the brother of White House advisor John Podesta.
John Podesta is now Clinton's Chief of Staff. In 1995, John
Podesta worked at the White House running encryption and super
computer policy. During the same period of time, the CSPP and
Clinton officials began a series of classified briefings on
encryption and super computer export policy.
In 1995 IBM and Silicon Graphics sold super-computers directly
to Russian Atomic weapon labs. IBM has since been fined $8.5
million on the $7 million sale. In fact, Commerce spokesman
Eugene Cotilli pointed out in October 1998 that the Commerce
Department investigation led to the conviction.
Of course, Commerce did not start investigating until the
Russian minister in charge of MINATOM (Ministry of Atomics)
announced publicly the U.S. computers would be used for nuclear
weapons research. Cotilli also did not deny that there is NO
investigation of CSPP member Silicon Graphics and their sale of
four super computers to Russian nuclear engineers at the
Chelyabinsk-70 weapons lab in the fall of 1996. Thus, while IBM
is convicted - Clinton supporter and Podesta associate client
Silicon Graphics remains uninvestigated.
In 1998, White House Special Counsel to the President Michael B.
Waitzkin wrote "In January 1997, Mr. Podesta resigned his
part-time position at Podesta Associates and returned to the
White House as Deputy Chief of Staff. Mr. Podesta was requested
by Senior Administration Officials to undertake certain
responsibilities with respect to encryption policy. He did not,
however, undertake these responsibilities until he received
specific approval from the White House Counsel's Office with
respect to his involvement in these matters."
Thus, Mr. Podesta sought and obtained approval for his conflict
of interest in 1997. Whether John and Tony Podesta shared a
conflict of interest in 1995 has so far remained unresolved but
not uninvestigated. House investigators in the Cox/Dix
committee and on the House National Security Committee have
sought information on the CSPP and John Podesta. Mr. John
Podesta refuses to be interviewed.
The fact is, Podesta Associate employee Ken Kay made thousands
of dollars in donations to the DNC in 1994 and 1995. Yet,
according to CSPP lawyer C. Boyden Gray, Ken Kay only donated
$2,500 of which $1,250 was returned by the DNC in the form of a
painting. According to official Federal Election Commission
records, none of Mr. Kay's donations totaled to $2,500 or
$1,250. Mr. Kay also will not respond to interview requests.
The CSPP is, in part, still funded by the taxpayer. The CSPP is
now helping the Clinton administration design the next
generation internet and getting paid to do it. Obviously, many
of the CSPP members will benefit financially as each new
Internet contract is offered and they sell more equipment.
In 1998 CSPP lawyer C. Boyden Gray claimed that official Clinton
secret meetings began in November 1995. Reinsch, however,
clearly wrote to Ron Brown about an earlier secret meeting in
June of 1995, when Tony Podesta employed Ken Kay and John
Podesta was charged with computer oversight policy.
The materials given to CSPP members at the White House on
encryption are considered so sensitive that they have no public
classification level such as secret or top secret. The true
secrets of Clinton's encryption policy involve hidden back doors
and exploitable features built into computer products. The
secrets given to CSPP members involved classified means of
electronic surveillance to be built inside domestic products by
The Clinton administration offered billions of tax dollars as
incentive to bug every fax, phone and computer built. Clinton
offered military chip designs backed by decades of cold war
research. The CSPP was given access to military algorithms and
taxpayer funded programs as incentives to adopt a secret
"back-door" concept for computers and communications. William
Reinsch, John Podesta, Ken Kay and the DNC all refuse to comment
on Bill Clinton's secret project to bug America and the world.
William Reinsch & CSPP Source Document index -
1 if by land, 2 if by sea. Paul Revere - encryption 1775
Charles R. Smith
SOFTWAR http://www.softwar.net [email protected]
SOFTWAR EMAIL NEWSLETTER 10/27/1998
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Robert A. Hettinga <mailto: [email protected]>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'